Why is Rivian’s share price up 7% today?

Posted: 15 February 2022 8:30 am
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The EV maker's stock has been on the rise since billionaire investor George Soros disclosed a massive stake in the company.

Shares of EV startup Rivian (RIVN) climbed as much as 13% Monday morning after a Securities and Exchange Commission (SEC) filing showed that a well-known billionaire investor had taken a large stake in the company.

Why are shares of Rivian up?

Billionaire investor George Soros revealed in a 13F filing on Friday that his investment company Soros Fund Management snatched up almost 20 million Rivian shares last quarter. The stake was worth a little over US$2 billion at the time, but it's now worth only about US$1.24 billion.

According to the filing, Soros' biggest holdings now are his stake in Amazon (AMZN) and Ford (F)-backed electric truck maker Rivian.

Shares climbed as high as US$66.40 Monday morning, before pulling back slightly. The stock is up 7% at the time of this writing.

The S&P 500 is down 0.75%, and the Dow Jones Industrial Average is off about 0.87%.

Thinking of buying Rivian stock?

Rivian (RIVN) went public in November 2021 at US$78 a share, valuing the EV company at US$66.5 billion. But it opened for trading 37% higher at US$106.75, putting its market cap above both General Motors (GM) and Ford.

But its shares have slumped 40% so far this year, compared to the S&P's 8.57% drop and the Dow's 5.85% decline.

The company announced last month that it produced 1,015 vehicles and delivered 920 vehicles in 2021, falling short of its target. Rivian shared plans in November to produce 1,200 R1Ts, its US$67,500 electric pickup truck, and 25 R1Ss, its US$70,000 SUV, by the end of the year. It planned to deliver 1,000 R1Ts and 15 R1Ss in 2021.

EV competition has been growing, and those that went public in the last couple of years via special purpose acquisition companies (SPACs) are facing investigations from federal securities regulators.

But with shares down 40% so far this year, some investors may see Soros's disclosure of his stake in Rivian as a sign that the stock is a buy now at a discount, which would explain the pop.

Of the 13 analysts covering the stock, eight have called it a Strong Buy or Buy, versus just five Holds and no Sells of any kind. The 12-month consensus price target is US$132.93, a US$108.65% premium over its current price.

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At the time of publication, Matt Miczulski owned shares of RIVN and AMZN.

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